The weekly messenger | Edition 28.20

Accounting News

ED of GN on Revenue from Operations in case of Contractors – 1 August 2020

The ICAI has issued the Exposure Draft (ED) of Guidance Note (GN) on Revenue from Operations in case of Contractors, which deals with the issue whether the revenue recognized in the financial statements of contractors as per the requirements of AS 7, Construction Contracts (Revised 2002) and  Ind AS 115 Revenue from Contracts with Customers, can be considered as Revenue from Operations for presentation in Schedule III to Companies Act, 2013.

Comments are to be provided by 31 August 2020.

For more information, click here.

Auditing News

Cost Auditing and Assurance Standards Board Release of General FAQs on SCAs 101-104 – 29 July 2020

The Cost Auditing and Assurance Standards Board of the ICMAI, has issued the Frequently Asked Questions (FAQs) on the Standards on Cost Auditing (SCAs 101-104).

For more information, click here.

Technical Cell of the ICMAI updates the responses to the queries upto 29 July 2020 – 29 July 2020

The Technical Cell of the ICMAI has issued a set of queries and responses w.r.t. various issues related to Cost Audit for the term 2018-19 and 2019-20.

For more information, click here.

PCAOB Conversations with Audit Committee Chairs: COVID-19 and the Audit – 31 July 2020

The Public Company Accounting Oversight Board (PCAOB) has issued a new publication ‘Conversations with Audit Committee Chairs: COVID-19 and the Audit’. In light of COVID-19, the PCAOB staff has asked the audit committee chairs that how they are thinking about the effects of COVID-19 on financial reporting and the audit as they perform their oversight duties.

The two important audit committee considerations, which have been focused in the publication are the increased risks associated with remote work and increased communications with the auditor.

For more information, click here.

Regulatory News

Clarification on dispatch of notice under Section 62(2) of the Companies Act, 2013 by listed companies for rights issue opening upto 31 December 2020 – 3 August 2020

The Ministry of Corporate Affairs (MCA) vide its Circular dated 11 May 2020, after considering the Securities and Exchange Board of India’s (SEBI) Circular dated 6 May 2020, had clarified that any inability on part of the listed companies to dispatch the notice to shareholders through registered post or speed post or courier would not be treated as violation under Section 62(2) of the Companies Act, 2013 for the right issues opening upto 31 July 2020. Now, this date has been extended till 31 December 2020.

For more information, click here.

SEBI Settlement Scheme, 2020 – One time Settlement Scheme – 27 July 2020

The SEBI vide its Public Notice dated 27 July 2020, has issued the Settlement Scheme in terms of Regulation 26 of the SEBI (Settlement Proceedings) Regulations, 2018. The purpose of this Scheme is to provide a one-time settlement opportunity to the entities that have executed trade reversals in the stock options segment of Bombay Stock Exchange (BSE) during the period from 1 April 2014 to 30 September 2015 against whom any proceedings are pending.

The ICAI has also issued certain FAQs on this Scheme.

For more information, click here.

For ICAI’s FAQs, click here.

Relaxations relating to procedural matters – Takeover and Buy-back – 27 July 2020

The SEBI vide its Circular dated 14 May 2020, had granted certain one time relaxations from strict enforcement of certain regulations of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and SEBI (Buy-back of securities) Regulations, 2018 pertaining to open offers and buy-back through tender offers opening upto 31 July 2020.

Now, after receiving various representations, the SEBI has extended the validity of the aforesaid relaxions till 31 December 2020.

For more information, click here.  

Extension of time for submission of financial results for the quarter/half year/financial year ended 30 June 2020 – 29 July 2020

As per Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), a listed entity is required to submit its quarterly/half year/annual financial results within 45 or 60 days, as applicable, from the end of each quarter/half year/financial year. Accordingly, listed entities are required to submit their financial results for the quarter/half year/financial year ended 30 June 2020, on or before 14 August 2020.

Due to shortened time gap between the extended deadline for submission of financial results for the period ended 31 March 2020 (i.e. 31 July 2020) and the quarter/half year ended 30 June 2020 (i.e. 14 August 2020), the SEBI has decided to extend the timelines for the quarter/half year/financial year ended 30 June 2020 from 14 August 2020 to 15 September 2020.

For more information, click here.

Use of digital signature certifications for authentication / certification of filings / submissions made to Stock Exchanges – 31 July 2020

The SEBI vide its Circular dated 17 April 2020, had permitted the use of digital signature certifications for authentication/certification of filings/submissions made under the Listing Regulations to the stock exchange till 30 June 2020.

Now, the SEBI has extended the permission of using the digital signature certifications upto 31 December 2020.

For more information, click here.

Clarification on applicability of regulation 40(1) of Listing Regulations to open offers, buybacks and delisting of securities of listed entities – 31 July 2020

The proviso to Regulation 40(1) of the Listing Regulations states that “..except in case  of transmission or transposition of securities, requests for effecting transfer of securities shall not be processed unless the securities are held in the dematerialized form with a depository.”

Therefore, the SEBI was receiving various representations from investors expressing concerns that they were not been able to participate in open offers, buybacks and delisting of securities of listed entities since the securities held by them were not in dematerialized form.

Accordingly, the SEBI has clarified that shareholders holding securities in physical form are allowed to tender shares in open offers, buy-backs through tender offer route and exit offers in case of voluntary or compulsory delisting. However, such tendering shall be as per the provisions of respective regulations.

For more information, click here.

IRDAI (Regulation of Insurance Business in Special Economic Zone) (Amendment) Rules, 2020 – 30 July 2020

The Central Government has amended the Insurance Regulatory and Development Authority of India (IRDAI) (Regulation of Insurance Business in Special Economic Zone) Rules, 2015 with the IRDAI (Regulation of Insurance Business in Special Economic Zone) (Amendment) Rules, 2020, wherein after Rule 3, a new Rule i.e. Rule 4 ‘Provisions regarding regulation of Intermediaries or Insurance Intermediaries in Special Economic Zones’ has been inserted.

These Rules shall come into force w.e.f. 30 July 2020.

For more information, click here.